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- Strawberry Corp. has various equity investment at fair value through profit or loss transactions during 2020 and 2021. The acquisition cost of all the securities in its portfolio during 2020 was P 532,000. At December 31, 2020 and December 31, 2021, the market values of these investments were P 541,000 and P 512,000, respectively. In 2022, all of these securities were sold for P 550,000. Assuming that the securities held by Strawberry Corp. are classified as at fair value through other comprehensive income, what is gain on sale reported in Strawberry Corp.’s 2021 income statement?Strawberry Corp. has various equity investment at fair value through profit or loss transactions during 2020 and 2021. The acquisition cost of all the securities in its portfolio during 2020 was P 532,000. At December 31, 2020 and December 31, 2021, the market values of these investments were P 541,000 and P 512,000, respectively. In 2022, all of these securities were sold for P 550,000. What is the gain on sale reported in Strawberry Corp.’s 2022 income statement?The following investment-related transactions were completed by LackyCorp. during 2020 - Purchased 30,000 shares of Y Company ordinary shares at P125 per share plus brokerage fees of P28,500. Lackyclassified this stock as non-trading security (FVTOCI) -Sold 4,500 shares of Y Company at P132 per share. a.At what amount should the Y Company shares be measured on initial recognition? b.How much is the realized gain or loss on the sale of Y Company shares?
- Swifty Company has several investments in the securities of other companies. The following information regarding these investments is available at December 31, 2020. 1. Swifty holds bonds issued by Dorsel Corp. The bonds have an amortized cost of $316,000 and their fair value at December 31, 2020, is $405,000. Swifty intends to hold the bonds until they mature on December 31, 2028. 2. Swifty has invested idle cash in the equity securities of several publicly traded companies. Swifty intends to sell these securities during the first quarter of 2021, when it will need the cash to acquire seasonal inventory. These equity securities have a cost basis of $808,000 and a fair value of $927,000 at December 31, 2020. 3. Swifty has an ownership stake in one of the companies that supplies Swifty with various components Swifty uses in its products. Swifty owns 6% of the common stock of the supplier, does not have any representation on the supplier’s board of directors, does not…On November 1, 2021, Romblon Company invested in P600,000 in equity securities representing 20,000 ordinary shares of Coke Company. The investment was designated as equity investments at fair value through profit or loss since the company intends to sell the security for a short-term profit. On December 31, 2021, this investment had a market value of P580,000. On January 15, 2022, Romblon sold the investment for P630,000. What amount of realized gain should Romblon recognized on the disposal of the investments?Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016. Cost Fair Value Investment in Readfield Company common stock $125,000 $115,500 Investment in Lee Company common stock $100,000 $ 80,000 Investment in Stern Company common stock $250,000 $300,000 Investment in Jones Company common stock $180,000 $190,000 $655,000 $685,500 These investments are classified as trading security by Jamison who uses portfolio approach to account for those investments. During the year 2017, Lee Company’s stock was sold for $102,000. Jamison purchased common…
- During 2021, Lavida Loca Company purchased trading securities with the following cost and market value on December 31, 2021. Cost Market value A 300,000 400,000 B 1,500,000 1,700,000 C 3,800,000 3,900,000 The entity sold Investment C on January 10, 2022 for P 4,000,000 What is the unrealized gain or loss should be reported in the income statement for 2021? a. 100,000 gain b, 100,000 loss c. 400,000 gain d. 400,000 lossDuring 2020, Strawberry Corporation purchased several equity securities, all of which are designated as equity investments at fair value through profit or loss. The cost and market values at December 31,2020 were as follows:SecurityAB Company ordinary - Cost -P28,000 ; Market -P34,000 ; 200 sharesCD Company ordinary - Cost -P 170,000 ; Market -P 153,000 ; 1000 shares EF Company ordinary - Cost- P315,000 ; Market - P295,000 ; 2000 sharesAppropriate valuation entry was made on December 31, 2020. On January 31, 2021, Strawberry sold 1,000 ordinary shares of CD Company at P155 per share, incurring P900 in broker's commission and taxes.On December 31, 2021, the market values of the ordinary shares of AB Company and EF Company were P150 and P153 per share, respectively. 1. What Is the unrealized gain (loss) reported in profit or loss for the year 2020? a P31,000 b. P(31,000) c. P43,000 d.P(43,000) 2. How much was the gain or loss on the sale of CD shares? a. P1,100 gain…During 2020, Strawberry Corporation purchased several equity securities, all of which are designated as equity investments at fair value through profit or loss. The cost and market values at December 31,2020 were as follows:SecurityAB Company ordinary - Cost -P28,000 ; Market -P34,000 ; 200 sharesCD Company ordinary - Cost -P 170,000 ; Market -P 153,000 ; 1000 shares EF Company ordinary - Cost- P315,000 ; Market - P295,000 ; 2000 sharesAppropriate valuation entry was made on December 31, 2020. On January 31, 2021, Strawberry sold 1,000 ordinary shares of CD Company at P155 per share, incurring P900 in broker's commission and taxes.On December 31, 2021, the market values of the ordinary shares of AB Company and EF Company were P150 and P153 per share, respectively. What is the equity Investment at FVPL balance reported at December 31, 2021 statement of financial position? a. P239,000 b. P329,000 c. P336,000 d. P343,000
- At December 31, 2018, Hull-Meyers Corp. had the following investments that were purchased during 2018, itsfirst year of operations:Cost Fair ValueTrading Securities:Security A $ 900,000 $ 910,000Security B 105,000 100,000Totals $ 1,005,000 $ 1,010,000 Securities Available-for-Sale:Security C $ 700,000 $ 780,000Security D 900,000 915,000Totals $ 1,600,000 $ 1,695,000Securities to Be Held-to-Maturity:Security E $ 490,000 $ 500,000Security F 615,000 610,000Totals $ 1,105,000 $ 1,110,000No investments were sold during 2018. All securities except Security D and Security F are considered shortterminvestments. None of the fair value changes is considered permanent.Required:Determine the following amounts at December 31, 2018.1. Investments reported as current assets2. Investments reported as noncurrent assets3. Unrealized gain (or loss) component of income before taxes4. Unrealized gain (or loss) component of accumulated other comprehensive income in shareholders’ equityDuring 2021, Barto Company purchased marketable equity securities as short-term investment to be measured at fair value through other comprehensive income. The cost and market value on December 31, 2021 were as follows: Security No. of Shares Cost Market Value A 5,000 500,000 550,000 B 25,000 2,800,000 2,650,000 C 40,000 2,150,000 3,950,000 The entity sold 10,000 shares of B on January 5, 2022 for P150 per share. The market price per share of Security A and Security C is P320 and P150 respectively, as of December 31, 2022. What amount should be recognized in the Profit or Loss Statement as realized gain or loss on sale of equity securities during 2022?McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date. Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000 Investment Securities 2: Monty, Inc. preferred (3,500 shares), Cost: 133,000, Fair Value: 140,000 Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000 On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000. Instructions:Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. None of these investments represents significant influence. The Fair Value Adjustment account has a zero balance prior to September 30, 2025.
